In a recent decision[1] the Supreme Court of Western Australia was asked, pursuant to section 447A of the Corporations Act 2001 (Cth), to appoint a special purpose administrator to cure a perceived conflict of interest between a company (in administration) and the original administrator appointed to the company.
Law clerk, Myles Engelen, discusses the decision of the Supreme Court of New South Wales, in McGrath & Anor re HIH Insurance Ltd approving a proposal to use excess assets of some members of the group to fund claims by the group members.
Good evening.
Below are the summaries of this week’s civil decisions of the Court of Appeal for Ontario.
The Ontario Court of Appeal released its much anticipated decision on the appeals taken from the trial decision of Justice McEwen in Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP et al.
The Newfoundland and Labrador Court of Appeal recently confirmed that accounting/auditing firms may take on several mandates in respect of companies that may or do become insolvent inWabush Hotel Limited v Business Development Bank of Canada, 2017 NLCA 35 (“Wabush Hotel”), which was released on May 25, 2017.
This case provides additional comfort to such firms that previous consulting or review engagement work will not prohibit them from acting in a receivership role in later insolvency proceedings.
Background
Does a potential administrator’s involvement in pre-administration contingency planning give rise to a conflict of interest, such that the potential administrator should be disqualified from accepting the formal appointment?
Korda, in the matter of Ten Network Holdings Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2017] FCA 914
In State of Victoria v Goulburn Administration Services (In Liquidation) & Ors [2016] VSC 654, the Victoria Supreme Court appointed two partners of Ernst & Young (EY) as special purpose liquidators (SPLs) of two companies, despite EY's involvement in carrying out contractual compliance audits before those companies went into liquidation.
The Federal Court of Australia in Kelly v Willmott Forests Ltd (in liquidation) (No 4) [2016] FCA 323 rejected an application for approval of settlement under s 33V of the Federal Court of Australia Act 1976 (Cth), confirming that the Court’s role is akin to a ‘guardian’ for the group members.
Background
In the recent case of Queensland Mining Corporation Ltd v Butmall Pty Ltd (in liq), the Court held that the liquidators' relationship with a major creditor of the company in liquidation (Butmall) did not per se amount to a conflict of interest.
Butmall applied to have its liquidators removed as they were the auditors of its major creditor (QMC), against whom Butmall purported to have considerable counterclaims.
A recent case[1] is a reminder to creditors in a voluntary winding up that the Court has the power to appoint an additional or special purpose liquidator (SPL) to carry out a set function in the orderly liquidation of a company where it is 'just and beneficial' to do so.
What is a special purpose liquidator?